Today’s guest post is an open letter to Obama from a twentysomething investment banker working in a London office of a US bank. The letter is in response to the salary caps Obama is putting on bankers who receive bailout money. The cap is $500,000.

I do not necessarily agree with the ideas in this letter, but I think this is an important workplace topic for debate.

Dear Mr. Obama,

First of all, I would like to say how relieved I am to have made it through your firewall despite writing from my workplace account. Secondly, I would like to congratulate you on your bold and assertive moves to nip that pernicious weed we call capitalism in the bud. It’s about time somone brought change to the outdated american dream.

I would like to humbly request however that you apply the principle of capped pay to other areas of my professional life. For instance, can we also cap hours worked?

I know what you’re thinking – sounds a little too French. But I think the great American people could learn from the French. After all, circa 250 years ago they were the world’s greatest superpower only to fall into precipitous decline at the hands of a fiscally irresponsible and greedy ruling class (seeing any parallels?). The people believed in change and made it happen (capping pay was a little too bourgeois for those times, so they resorted to capping heads, but all in all it is the same).

Now – 250 years later, France have rebuilt themselves into a fine socialist state, and while they are not quite a superpower, their president is regularly intimate with Carla Bruni – what more do you need?

I believe in france the rule is that 35 hours of work a week is plenty and any time beyond that is free time (“le freedom time”). That may be a bit too radical for Wall Street at first, but may I suggest we use the same yardstick you used to cap pay – benchmarking it to the President of the United States.

Recent press reports indicated you start work at 9am and are sometimes seen in your office as late as 10pm! It also mentioned that you have meetings on Saturdays (and wear slacks, which is a step in the right direction – I can’t wait to see what the press says when you unleash the true Hawaiian in you and show up in board shorts and flip-flops!). So I will go ahead and estimate your average weekly working hours at 62 hours (9am-10pm 2 days a week, 9am-7pm 3 days a week, plus a 6 hour day on Saturday – please let me know if these assumptions are way off). I bow to your superior judgement, but I would just like to open the debate on limiting our working hours to 62 weekly hours.

I admire you greatly, and if this were implemented I would be able to follow your example more closely. I could become a more dedicated family man. I could work out daily (cardio and weights). I could walk about topless for the paparazzi. All in all, a few years down the line I would look back at the positive change you have made in my life and feel a debt of gratitude. All I ask though is that you please consider this suggestion.

Comments (102)

The sun is rising here on the east coast, it’s a new day, and I have a new appreciation for Penelope’s writing. Life is full of peaks and valleys. Peaks are nice, but honestly, how would you be able to distinguish the peaks from the valleys without the valleys? I’m looking forward to future peaks.

Oh this kind of bores me, but I’ll chime in, too. People should work as many hours as they want. When I was in my 20s – that was a whole bunch. When my kids were babies – that was 20 hours a week. Today, I work until I get my stuff done then I stop. Hourly caps/requirements/etc. put an emphasis on hours, rather than outcomes.

Oh please, you guys saying this is bad writing, give me a BREAK. Seriously, you may not like the tone but this is FAR from bad writing.. “Oooh.. it’s snarky! It must be immature..”. seriously, just gimme a BREAK.

Now for the real issue: limiting hours? I say no, because most of these people have a choice. They are not forced to take these jobs. Most of them are reasonably well off, and intelligent. If they want to sacrifice their personal lives, and health for good pay, let them.. it’s their choice. I’m a true believer in the free market, and by limiting their hours you’re basically restricting growth, by not allowing individuals to make their own decisions. If this was slave labor, then I would have an issue with it, but it’s not. It’s grown men – if they feel like they want to work 120 hour weeks for a few years, then retire early, let them.

Brandeis did say a lot about money, finance, and labor relations that apply today. He’s a giant. I wish he were not so overlooked. There are a few excellent biographies including one that is coming up by Melvin Urofsky.

This is silly beyond words. The cap only applies if the government owns a piece of you – in other words, is a shareholder. I’m a partner in a startup company and my pay is capped – it was insisted upon by one of our investors.

Investment bankers should thank their lucky stars the DOJ hasn’t gone after them for price fixing. Why is that they all charge 7% of proceeds for an IPO?

I’m a scientist. I work very long hours and have been through many years of training to get to this point at very low pay. I love my job, I’m good at it. I’ve paid my dues. I don’t earn six figures, much less 500K. I have a quality life despite the workload and my reasonable pay.

To the investment bankers that feel like this poster I say, FO. More of you need to be fired right now. It is no accident there is a massive palpable anger at those who earn ridiculous money while losing significant amounts from retirement funds. The idea that anyone thinks they deserve multiple millions when their performance is terrible is delusional. The key word there is “deserve”. The arrogance of that community is shocking. They deserve to be humbled.

If someone would open a retirement fund company that capped salaries at 500K they would have my money instantly. I bet there’s a huge huge market there for that. I hope the days of the egocentric business narcissist are over. If anything, it clearly is a huge drag on business competitiveness (think of the backlash of the Auto execs private jet travel etc).

I’m trying to understand…it’s still capitalism if the government saves your ass but it’s socialism if the government that saved your ass limits how you spend that money? The entire industry will not be forced to cap pay; only the institutions that take daddy’s money have to play by daddy’s rules. That seems entirely fair to me.

Remember in high school how your parents clothed, housed, and fed you and you had a curfew? And then how when you got a job and your own place, you didn’t have a curfew? I know it stinks but whoever is paying the bills gets to make the rules.

The Treasury got preferred stock in exchange for much of the bailout money. So the government owns a large chunk of AIG, Wells Fargo, B of A, Citi and so on. I understand they get a guaranteed 8% return for the non-voting stock. But what if it was converted to common stock? Returns would drop to almost zero, but the government would actually own 80% of AIG, over 70% Citi, over 67% of Wells Fargo, etc. Then they could actually dictate how much the excutives could be compensated and other conditions.

It’s ALMOST tempting enough to take the common stock, and dictate that the executives take $0.50/yr, and walk up and down Wall St in their underwear every day till the government is paid back.

It is true that at some point, you can actually make more money that you should ever really be worth. Let’s say I make the equivalent of $300/hour in a fair exchange of money/shares for work. Let’s say I work every hour of the day – 24 hours per day, 7 days per week. That still only gives me a yearly income of $2,628,000 per year. And yet some CEO’s make more like $14,000,000 per year. And they cry about their loss of profits.

Yes, superstar musicians, movie and sports stars make more, but we all know that their pay scale is not based in reality.

There was a possibility that an argument could have been made against salary caps but it was lost in the whine of someone who seems to beleive that they are entitled to large sums of money just because they put a decent amount of hours in at the office. Guess what? A lot of people work hard; really hard and seldom see $500K. To the investment bankers (especially the new guy in the Calvin Klein slim fitting eurosuit who thinks he’s got it dialed in), stop losing my money by the trillions and then we can talk about dropping the salary cap. Or you can pass on the bailout money and just suck it up and see what happens.

Posted by Chris who also works many hours
on February 10, 2009 at 11:46 am
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Also, when the company is doing well, CEO’s seem to justify their wage thinking that it should reflect the profitability of the company. However, when the company is doing poorly, they never say they should get less.

And, the CEO is not usually the direct reason that profits are made within a company. With movie and sports stars, it is their individual presence that makes the project profitable, which almost justifies their salaries. Almost.

Ok, that leads me to a good question. While a CEO like Penelope have very specific roles and responsibilities, what do these CEO’s who are being paid millions of dollars do exactly?

They aren’t the one’s coming up with the brilliant marketing scheme, that’s the marketing department, they aren’t handing the infrastructure, that’s Operations, nor the Finance, that’s…well… Finance. There are so many executives between the CEO and the company that I frankly don’t know what they do other than issue press releases about their company that are written by other people.

As far as I can tell, the only thing they do is have Veto power over the ideas that the various departments come up with. They rarely actually come up with ideas or new business plans, they just get to say yes or no.

Someone please, in clear, concise, no business speak, language, tell me what these CEO’s do to earn their money, that someone with a some common sense and some psych and sociology classes can’t do.

Posted by Voice in the Crowd
on February 10, 2009 at 12:39 pm
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This post is sophomoric and hardly worthy of this site, IMHO.

But the point of salary caps is this:
If I loan you money to pay your mortgage because you’re about to lose your house, I don’t want you to show up at lunch the next day driving a new Mercedes.

Why is that so hard to understand? Parents handle this constantly with their children. If CEO’s want to act like irresponsible children, then they need to be treated as such. It has nothing to do with socialism. It’s a condition of THE LOAN, duh.

Oh, by the way, social workers, teachers etc, take their work home with them (LIVE IT 24/7) and don’t get paid for that. It’s bull what these guys take down after laying off tens of thousands of people – for the bottom line and shareholders. This isn’t a Monopoly game. Oh wait, yes it is.

@ Voice in the Crowd
Good question. I wish I knew too. I hear that they take the biggest risks so get paid the most but the ones I’ve seen who FAILED, take big bucks with them even when they are fired!

@ Belindetta I don’t know why readers of this blog hate psychology so much! The last post about therapy was at least half hatred toward the profession! I am not a social worker or teacher. I was using them as examples of professions that have to do extra work for no pay (one social worker in Los Angeles can have a thousand cases or more-don’t tell me they are slackers if they take it home. Plus they take it home emotionally, worrying about children involved, worried about the people involved that are on the skids.) I could just as easily mentioned business owners as I know first-hand there is no time off from your own business.

Also, the word “whine” is used way too much these days! The sky really is falling and if someone wants to whine about it, that’s okay with me…email me and I’ll listen. Are we going to turn into a Lord of the Flies nation?

Penelope – Speaking as a 20-something, this article doesn’t really deserve the publicity you just gave it. If you really wanted to spark discussion on working hours in America (or in general), there are much better ways to do so. Frankly, I’m disappointed.

If this author was really upset over his working conditions, he should have approached that directly. Instead, he resorts to snide remarks and speculation regarding the president’s working hours.

As for his views on the salary cap, he conveniently leaves out that the American Dream is only “nipped in the bud” for those who are begging for our money to keep afloat.

My personal opinion is that a cap on working hours would be wonderful. I think most all Americans put in too many hours. Also, I agree that there should not be a cap on salaries, because I also believe that there should not have been a bailout in the first place.

Perhaps, instead of complaining about a salary cap, he should be thankful that the bailout allows him to keep his job.

As for your part, there are better ways to spark discussion than reposting inflammatory articles.

As an ex-investment banker, it’s nice to see that the vast majority of people have no idea what an investment banker is our what they do. Full disclosure – I was against the TARP plan and went as far as contacting my representatives to vote against it. I was never more convinced that our federal government was full of people who do not understand economics or finance, then last fall when the sky was falling press conferences were a daily occurrence. The idea that these people were going to solve the crisis was ludicrous then and it’s ludicrous now- just listen to these braniacs on the bank and finance committee speak.

Here’s a newsflash: our economy isn’t in trouble because “greedy bankers stole money from pension funds”, but it sure sounds good doesn’t it.

Capping executive pay is a gimmick – it makes a great headline – but the reality is those jets, area rugs and toilets are not the problem, it’s not why the banks are in trouble and it certainly isn’t going to do an iota of good in fixing the problems (wouldn’t “wasting” all that money stimulate the economy?!) But it sells newspapers and drives tracks on blogs apparently.

Though I commented on the wages of CEO’s, I agree with Sarah that putting the attention on greedy CEO’s is merely a sensational diversion that makes us feel righteous – we’re sticking it to the man! In reality, it has no more caused the greater problem in the US economy than Osama Bin Laden had caused the problems in Iraq. But we have to get mad at someone.

Some jobs require extensive amounts of time and dedication to the cause – the presidency seems like a good example.

Some jobs, law and investment banking, require instead extensive barriers to entry. If it didn’t absolutely suck, anyone would do document review, because anyone could. Bullshit and insane competition fills this purpose. That’s where all the time goes.

I-bankers are mostly at the office because if they go home someone will replace them in their highly paid job. That’s it. There’s no cure-for-cancer or whatever keeping them there. And there’s no reason for our society to lavish endless cash on these people. They don’t provide a service for a wide enough group of people to justify the cost.

Isn’t that kind of calculation what led to the layoffs of the 80s? Weren’t these same people angry about the overpaid mechanics and dock workers and factory job holders? Didn’t the titans of wall street tell us that the key thing was to find the cheapest labor?

Now the cheapest i-banker is India too. Not a new story. Just a new industry.

You’re not right dear author.
In capitalism too, the benefits for the employees of public company are dictated in the end by the shareholders. As a major investor (because of the bail-out) the State can choose to limit the benefits of the employees in those banks. It is this simple. Shareholders rule in capitalism.

it is very interesting reading all the comments regarding this. i must say that i have a very different approach to what the author is saying. he sounds like he is a young man with a family and a desire to live happily. isn’t that what we are all trying to do? he wants time to enjoy the fruits of life. perhaps, he is addressing a deeper issue of where our happiness stems from. money? or the things that make us unique (like our family, passions, etc?

Capping hours per week is a great idea but it certainly won’t happen. Companies won’t stand for it. Think back a little. How many times in American History has government passed a law regarding the work week? Give up. ONE. Only one time have they addressed the issue. It was the creation of the Fair Labor Standards Act (FLSA) in 1938. The gov’t attempted to increase employment by forcing the regular work week to 40 hours. Companies didn’t won’t to do it but they were convinced they would get their money back (from the increase in labor cost) by flooding the market with products people don’t need and convincing them they do.

Why are most people assuming that he’s serious? He sounds sarcastic to me. Look at his word choice: the outdated american dream, nip capitalism in the bud. He’s using the ridiculous idea of being forced to work fewer hours to put down obama’s pay cap.

Another bank swoops in and saves another bank from utter destruction. The saving bank doesn’t like how the bank is run so they fire some crappy employees and cut what they feel like are bloated salaries. The general public sits back and applauds the shrewd management of the saving bank. They picked up some good assets (presumably) and get rid of some corporate fat.

But if we make the government the saving bank we cry like puppies about socialism and the end of America dream.

Banks failed because their employees failed. Bank employees should pay for their failure, not tax payers who bailed them out.